What are the Pros and Cons of a lease term 5 years plus 5 year option; industrial building

Answer(s)

Options are considered to benefit the Tenant, and not the Landlord. This is because the Tenant has the right to exercise the option, or let the deadline pass then renegotiate the rent. Options fix a price and terms in the future, but do not offer any guarantee that theTenant will remain in the space.

Try to avoid them if you can. If you can't avoid them, make the tenant pay for the option. He can buy a one year option for $1,000 at lease-signing. He can buy a 5 year option for $5,000. If he doesn't want to do that, you saved yourself a lot of aggravation 5 years from now.